I use a quasi-random urban-dweller allocation in rural areas during Mao’s Mass Rustication Movement to identify human capital externalities in education, employment, and social values. First, rural residents acquired an additional 0.1-0.2 years of education from a 1% increase in the density of sent-down youth measured by the number of sent-down youth in 1969 over the population size in 1982. Second, as economic outcomes, people educated during the rustication period suffered from less non-agricultural employment in 1990. Conversely, in 2000, they enjoyed increased hiring in all non-agricultural occupations and lower unemployment. Third, sent-down youth changed the social values of rural residents who reportedhigher levels oftrust, enhanced subjective well-being, altered trust from traditional Chinese medicine to Western medicine, and shifted job attitudes from objective cognitive assessments to affective job satisfaction. To explore the mechanism, I document that sent-down youth served as rural teachers with two new county-level datasets.

By exploring an instance of nationwide language education reform—the Chinese Pinyin Act of 1958-1960—we estimate the effects of language unification using a difference-in-difference approach by interacting a birth cohort exposure dummy with the linguistic distances between local languages and Putonghua—modern standardized Mandarin. This paper presents five main findings: (1) learning Putonghua results in modest short-term negative effects, but long-term positive effects on educational attainment; (2) learning Putonghua increases rural households’ non-agricultural employment; (3) sharing a common language empowers workers to migrate across provinces and language regions; and (4) using a unified language fosters patriotism, a stronger national identity, a more positive subjective evaluation of China, and even more distrust in people of another nationality. One plausible channel is that the common language builds national identity by expanding exposure to audio-based media (e.g., radio, cell phone, and the internet); and (5) the post-reform population shows more skepticism about democracy, a better subjective evaluation of governance, and greater support for government intervention over economic liberalism. These changes in ideology and social preferences are consistent with the political doctrine of the Communist Party of China.

We evaluate Eugene Fama’s claim that stock prices do not exhibit price bubbles. Based on US industry returns 1926-2014 and international sector returns 1985-2014, we present four findings: (1) Fama is correct in that a sharp price increase of an industry portfolio does not, on average, predict unusually low returns going forward; (2) such sharp price increases predict a substantially heightened probability of a crash but not of a further price boom; (3) attributes of the price run-up, including volatility, turnover, issuance, and the price path of the run-up can all help forecast an eventual crash; (4) these attributes also help forecast future returns. Results hold similarly in US and international samples.